To the right

A piece in the Economist notes that the economic policies of Romney are facing justifiable criticism.

It notes that Romney greeted Paul Ryan’s (R-WI) proposed budget which shockingly “proposed to slash income-tax rates, especially for the rich and businesses, and replace traditional Medicare with vouchers for the elderly to buy health insurance” the first time around caution, but as he got closer to winning the nomination, the article notes that Romney “steadily warmed to Mr Ryan’s plan as he faced a series of rivals from his political right. By December he was attacking Mr Gingrich for criticising it, and this past February he released a new tax plan of his own that slashed all personal tax rates by 20%. And when Mr Ryan produced a new, very similar, version of his budget on March 20th for next fiscal year, Mr Romney was effusive. ‘It`s a bold and exciting effort,'”.

The article goes on to mention how “His 2010 book, ‘No Apology’, reads more like a McKinsey report than a memoir” with “It ranges from the business practices of Japanese doctors to how much profit Comcast, a cable company, invests. Leaf through it and last September’s policy platform with its 59 specific proposals, and you will encounter sober discussion of ways to deal with greenhouse gases, international trade and retraining”.

It goes onto examine his policy advisers who “are Glenn Hubbard, the dean of Columbia University’s business school, and Greg Mankiw, a Harvard economist and author of bestselling textbooks. Both served as chairman of George W. Bush’s Council of Economic Advisers; neither is a fire-breathing conservative, having advocated policies anathema to the right such as cheap government-backed mortgage refinancing (Mr Hubbard) and higher petrol taxes to counter global warming (Mr Mankiw)”.

It adds that “Less than two months after the election, Mr Bush’s tax cuts and Mr Obama’s temporary payroll-tax cut will expire, while savage cuts to defence and other domestic spending will automatically kick in, thanks to the deal that raised the debt ceiling last August and the failure of a congressional committee to come up with an alternative. The combined fiscal effect would be worth 3.5%-5% of GDP, enough to tip the economy back into recession”.

It notes that Romney’s own economic proposals consist of “cut the corporate income-tax rate from 35% to 25%, end taxes on companies’ foreign earnings, and eliminate taxes on capital gains and dividends for those earning less than $200,000 a year. On personal taxes he promised only to preserve Mr Bush’s tax cuts (which would keep the top rate at 35% rather than returning it to 39.6%), while murmuring that one day broader reform, involving lower rates and a broader base, might follow. But those proposals increasingly looked timid next to the heftier, and more irresponsible, tax cuts his rivals rushed to embrace”.

Yet there is no room to tax cuts of any description, and they are exactly want is not needed at this time. Taxes on the wealthiest must raised and cutting capital gains taxes and Romney and Ryan propose are ludicrous and reckless.

Not only that but as the article mentions, “Romney claims that this plan would be neutral in terms of both revenue and distribution, meaning it would not change the level of tax take or the relative position of rich and poor”, this claim is of course ridiculous.

The faster this outdated neoliberalism is ditched the better society will be with a far greater chance of the common good becoming reality.